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Technology Stocks : Dell Technologies Inc.

DELL 133.35

+0.1%

Nov 28 9:30 AM EST

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To: larry who wrote (80496)	11/15/1998 5:13:00 PM
From: BGR	Read Replies (1) of 176387

Larry, I know that your post was intended for CTC but I hope that you won't mind if I take a shot at responding to your post as well: 1. Revenues were lower than many if not most analyst estimates. My understanding is that revenues are in line with historical revenue growth figures. Also, DELL must have beaten operating margin expectations as it came in with lower than expected revenues but better than expected earnings. Why is this not a positive? 2. Earnings barely beat estimates (if you use an extra decimal point they were 27.8 cents vs a 27 cent estimate). YOY Percentage EPS growth (64.7%) was actually way better than two of the previous 3 quarters (53.8%, 57.1% and 66.7 %). If analysts are doing a good job in estimating DELL's earnings growth, that doesn't mean that DELL is doing a bad job in growing earnings. Numbers tell the whole story. 3. Days Sales outstanding rose. Note CTC's posts. 4. Operating expenses as a per cent of revenues decreased (signalling that they held back on hiring and on other discretionary items to help them make the quarter). While that in general is the case for most companies, in DELL's case you have to adjust for the increase in internet sales as part of total revenue which reduces expenses. Get ready for more such reductions in future as such sales account for a larger share of DELL's revenues. 5. Gross margins declined and on the conference call they signaled that further declines are likely next year. I thought that gross margins were steady from last Q! Can you please check your numbers again? 6. Lastly, the balance sheet gave an indication that a large number of employees exercised options during the quarter. The irrelevancy of insider sales have been discussed to death in the past in this thread. Still no substantial new information to worry about. -Apratim.

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